Project Burn Rate Calculator
Analysis Summary
Monthly Burn Rate:
Budget Utilized:
Projected Total Cost:
Remaining Budget:
Understanding Project Burn Rate
A Project Burn Rate is the speed at which your project consumes its allocated budget over a specific period. For project managers, this is a critical Key Performance Indicator (KPI) to ensure the project remains financially viable and identifies potential budget overruns before they happen.
How to Calculate Burn Rate
The standard formula for calculating the monthly burn rate is:
Monthly Burn Rate = Total Actual Expenditure / Time Elapsed (Months)
Key Metrics Explained
- Monthly Burn Rate: The average amount of money spent every month.
- Budget Utilized: The percentage of the total budget consumed so far.
- Projected Total Cost: If the current burn rate continues, this is what the project will cost at the planned completion date.
- Runway: How much time remains before the budget is completely exhausted.
Realistic Example
Imagine a software development project with a $100,000 budget planned for 10 months. After 3 months, the project has spent $45,000.
- Actual Burn Rate: $15,000 per month ($45,000 / 3 months).
- Expected Burn Rate: $10,000 per month ($100,000 / 10 months).
- Status: The project is "burning" through cash 50% faster than planned. At this rate, the project will cost $150,000 by month 10, requiring a budget increase or scope reduction.